Today’s Canada and U.S. employment statistics, will the USD/JPY and CAD/JPY surge to new highs? - Strategy for October 5th, events schedule, and focal points -

◎ Current positions and strategies

EUR/USD Short position is on hold. Since the euro fell quickly, I expected a pullback. I consider 1.1545 and 1.1590 as pullback levels. I plan to reduce the position at 1.1550 and close at 1.1600.

EUR/USD Timeframe chart

EUR/USD Daily chart

CAD/JPY Long position is on hold. Yesterday, the gap opened at the start of the week has closed. With the gap closed, I think the pullback may be over. Today there is the Canadian employment data, so if the result is weak (deviates worse than expected), I will consider closing.Basic strategy is to hold up to 90 yen.

CAD/JPY Timeframe chart

CAD/JPY Daily chart

AUD/USD Short position is on hold. I’m using 0.7000 as a rough target for now, but I am also considering long-term holding. Depending on today’s US employment data results, I would like to focus on the average hourly earnings. If average hourly earnings deteriorate, I plan to close.

AUD/USD Timeframe chart

AUD/USD Daily chart

The euro and the pound are highly likely to move significantly depending on Brexit negotiations. In particular, the pound can move around 200 pips on statements from key figures. With talks ongoing ahead of the EU leaders' summit, it is unclear where statements will come from. I will watch headlines (including potential absence of headlines) closely.

Also, Japan has a three-day holiday coming up. Over the weekend, I want to ensure proper position adjustments.

◎ Today's points of interest

1)US and Canada Employment Statistics

US employment data are expected to be strong. Based on remarks from officials and ADP employment data, ISM, etc., strong results are expected. In particular, I will pay attention to average hourly earnings. I want to focus on the growth in wages and the deviation from market expectations.

Canada’s data focuses simply on changes in the number of employed persons.

Recent US employment data haven’t shown much movement. Personally, I feel Canada employment will move more. Therefore, I am considering trades based on Canada employment data.

2)Italy Budget Plan

There are signs of some compromise, but the submission of the budget plan is just beginning. Parliament is still reviewing and approving the budget. I am watching the headlines closely.

Euro swings on Italy budget plan! What’s the issue? Explained

3)Brexit Negotiations

As mentioned in the strategy, negotiations are tightening ahead of the EU summit. There are meetings with EU officials and UK leaders in various places. Personally, I have largely priced in negative materials related to Brexit negotiations. Therefore, unless a no-deal Brexit occurs unexpectedly, I don’t think pound selling will dominate. Conversely, favorable information for the UK or progress in negotiations could cause a sharp rise in the pound.

◎ Weekend Event Schedule

10/5 (Friday)

10:30 AUD Retail Sales
16:30 SEK Swedish Industrial Production
18:35 EUR Knot/ECB President Draghi speech
20:00 EURDe Guindos ECB Vice President speech
21:30 CADEmployment Change and Unemployment Rate・ Trade Balance
21:30 USDNFP Employment, Unemployment Rate, Average Hourly Earnings・ Trade Balance

10/6 (Saturday)

01:30 USD Kaplan, Dallas Fed President
01:40 USDBostic Atlanta Fed President speech

10/7 (Sunday)

Australia moves to Daylight Saving Time
Brazilian Presidential Election

◎ Records Room

I recorded yesterday’s major currency strength/weakness chart, global stock indices, long-term interest rates, and key figure speeches.

Records Room on October 4, 2018 — Key speeches and long-term interest rates